Drivers of Access to Credit Among Smallholder Farmers in Uganda: Application of Binary Logistic Model
Abstract
This study aimed at determining the drivers of access to credit among smallholder farmers in Uganda. Using a cross-sectional survey, data were collected from 374 farmers in Jinja district, followed by data analysis using descriptive statistics and Binary logistic regression model. Additionally, we used Chi-square and t-test to compare farmers with and without access to credit. The results showed that 62.83% of the farmers had access to credit. Additionally, farmers with access to credit were generally better off than those without access to credit. Having a mobile phone (p<0.01), group membership (p<0.01), access to extension (p<0.05), farm size (p<0.01) and distance to the market (p<0.05) had a positive and significant effect on credit access while non-farm income (p<0.05) showed an inverse relationship with credit access. To increase credit access among the smallholder farmers, farmers should be encouraged to purchase mobile phones and join groups where they would disseminate information on the various source of agricultural credit. Extension workers should also make effects of reaching all the farmers and training them on ways of accessing agricultural credit
Downloads
References
Adebayo, O. O., & Adeola, R. G. (2008). Sources and uses of agricultural credit by small scale farmers in Surulere Local Government area of Oyo State. Anthropologist, 10(4), 313–314. https://doi.org/10.1080/09720073.2008.11891069
Amanullah, Lakhan, G. R., Channa, S. A., Magsi, H., Koondher, M. A., Wang, J., & Channa, N. A. (2020). Credit constraints and rural farmers’ welfare in an agrarian economy. Heliyon, 6(10), e05252. https://doi.org/10.1016/j.heliyon.2020.e05252
Aryal, J. P., Sapkota, T. B., Rahut, D. B., Krupnik, T. J., Shahrin, S., Jat, M. L., & Stirling, C. M. (2020). Major Climate risks and Adaptation Strategies of Smallholder Farmers in Coastal Bangladesh. Environmental Management, 66(1), 105–120. https://doi.org/10.1007/s00267-020-01291-8
Assogba, P. N., Haroll Kokoye, S. E., Yegbemey, R. N., Djenontin, J. A., Tassou, Z., Pardoe, J., & Yabi, J. A. (2017). Journal of Development and Agricultural Economics Determinants of credit access by smallholder farmers in North-East Benin. 9(8), 210– 216. https://doi.org/10.5897/JDAE2017.0814
Cochran, W. G. (1963). Sampling Techniques (2nd Ed). John Wiley and Sons, Inc.
Diao, X., Hazell, P., & Thurlow, J. (2010). The Role of Agriculture in African Development. World Development, 38(10), 1375–1383. https://doi.org/10.1016/j.worlddev.2009.06.011
Saqib, E. S., Kuwornu, J. K. M., Panezia, S., & Ali, U. (2018). Factors determining subsistence farmers’ access to agricultural credit in flood-prone areas of Pakistan. Kasetsart Journal of Social Sciences, 39(2), 262–268. https://doi.org/10.1016/j.kjss.2017.06.001
Endalew, B., & Yenewa, W. (2021). Determinants of farm households’ participation in fish production in Southwest Ethiopia. Cogent Food & Agriculture, February 2020. https://doi.org/10.1080/23311932.2020.1728107
Epule, T. E., Ford, J. D., Lwasa, S., Nabaasa, B., & Buyinza, A. (2018). The determinants of crop yields in Uganda: What is the role of climatic and non-climatic factors? Agriculture and Food Security, 7(1), 1– 17. https://doi.org/10.1186/s40066-018-0159-3
FAO. (2002). The Role of Agriculture in the Development of Least-developed Countries and their Integration into the World Economy. Fao, 7. http://www.fao.org/3/a-y3997e.pdf
FAO. (2005). The state of food insecurity in the world: Eradicating world hunger - Key to achieving the Millennium Development Goals. In Food and Agriculture Organization of the United Nations.
FAO. (2018). National gender profile of agriculture and rural livelihoods - Uganda. Country Gender Assessment Series, Kampala. In Food and Agriculture Organization of the United Nations (Vol. 11).
FAO. (2021). Water productivity, the yield gap, and nutrition. In Water productivity, the yield gap, and nutrition. https://doi.org/10.4060/cb3866en
Fiala, N., & Apell, D. (2017). Transforming Uganda’s agricultural sector for sustained economic growth Economic context. 43422. www.theigc.org
Ijioma, J. C., & Osondu, C. K. (2015). Agricultural Credit Sources and Determinants of Credit Acquisition by Farmers in Idemili Local Government Area of Anambra State. Journal of Agricultural Science and Technology B, 5, 34–43. https://doi.org/10.17265/2161-6264/2015.01.004
Imam, E., & Kushwaha, S. P. S. (2013). Habitat suitability modelling for Gaur (Bos gaurus) using multiple logistic regression, remote sensing and GIS. Journal of Applied Animal Research, 41(2), 189–199. https://doi.org/10.1080/09712119.2012.739089
Jaza, F. A. J., Tsafack, P. P., & Kamajou, F. (2018). Logit model of analysing the factors affecting the adoption of goat raising activity by farmers in the non-pastoral centre region of Cameroon. Tropicultura, 36(1), 54–62. https://doi.org/10.25518/2295-8010.976
Jegede, O. O. (2020). Node between firm’s knowledge-intensive activities and their propensity to innovate: Insights from Nigeria’s mining industry. African Journal of Science, Technology, Innovation and Development, 12(7), 873– 881. https://doi.org/10.1080/20421338.2020.1746043
Jimi, N. A., Nikolov, P. V., Malek, M. A., & Kumbhakar, S. (2019). The effects of access to credit on productivity: separating technological changes from changes in technical efficiency. Journal of Productivity Analysis, 52(1–3), 37–55. https://doi.org/10.1007/s11123-019-00555-8
Khanal, A. R., & Omobitan, O. (2020). Rural Finance, Capital Constrained Small Farms, and Financial Performance: Findings from a Primary Survey. Journal of Agricultural and Applied Economics, 52(2), 288–307. https://doi.org/10.1017/aae.2019.45
Komicha, H. H., & Ohlmer, B. (2007). Influence of Credit Constraint on Technical Efficiency of Farm Households in Southeastern Ethiopia. International Conference on African Development. Center for African Development Policy Research, 125(125), 1–29.
Kraybill, D., Bashaasha, B., & Betz, M. (2012). Production and Marketed Surplus of Crops in Uganda , 1999-2006 (Issue September 2014).
MAAIF. (2020). The Republic of Uganda Ministry of Agriculture, Animal Industry and Fisheries, Draft Anual Report. 1–150(October), 150.
Moahid, M., Khan, G. D., Yoshida, Y., Joshi, N. P., & Maharjan, K. L. (2021). Agricultural credit and extension services: Does their synergy augment farmers’ economic outcomes? Sustainability (Switzerland), 13(7). https://doi.org/10.3390/su13073758
Mozumdar, L. (2012). Agricultural productivity and food security in the developing world. Bangladesh Journal of Agricultural Economics, 35(1/2), 53–69.
Okello, D. M., Bonabana-Wabbi, J., & Mugonola, B. (2019). Farm level allocative efficiency of rice production in Gulu and Amuru districts, Northern Uganda. Agricultural and Food Economics, 7(1), 1– 19. https://doi.org/10.1186/s40100-019-0140-x
Pawlak, K., & Kołodziejczak, M. (2020). The role of agriculture in ensuring food security in developing countries: Considerations in the context of the problem of sustainable food production. Sustainability, 12(13). https://doi.org/10.3390/su12135488
Ray, P. (2020). Socio-Economic Characteristics of Farmers on Access to Agricultural Credit in Tripura. International Journal of Inclusive Development, 6(1). https://doi.org/10.30954/2454-4132.1.2020.3
Saleem, M. A. (2008). Sources and Uses of Agricultural Credit by Farmers In Dera Ismail Khan (District) Khyber Pakhtonkhawa Pakistan. European Journal of Business and Management, 3(3), 111–122.
Sekyi, S., Abu, B. M., & Nkegbe, P. K. (2020). Effects of farm credit access on agricultural commercialization in Ghana: Empirical evidence from the northern Savannah ecological zone. African Development Review, 32(2), 150–162. https://doi.org/10.1111/1467-8268.12424
UBOS. (2017). Area Specific Profiles Nwoya District. The National Population and Housing Census 2014, April.
UBOS. (2018). Uganda Bureau of Statistics. The 2018 Statistical report. 345.
Water, D., Sadras, V. O., Cassman, K. G. G., Grassini, P., Hall, A. J., Bastiaanssen, W. G. M., Laborte, A. G., Milne, A. E., Sileshi, G., & Steduto, P. (2015). Yield gap analysis of field crops: Methods and case studies. In FAO Water Reports (Vol. 41). https://www.scribd.com/document/359258445/Yield-Gap-Analysis-FAO-2015
Zulfiqar, F., Shang, J., Zada, M., Alam, Q., & Rauf, T. (2021). Identifying the determinants of access to agricultural credit in Southern Punjab of Pakistan. GeoJournal, 86(6), 2767–2776. https://doi.org/10.1007/s10708-020-10227-y
Copyright (c) 2022 Dick Chune Midamba, Atukunda Bwesigye Obrine, Mary Kwesiga, Alela Beatrice, Ogei Kizito
This work is licensed under a Creative Commons Attribution 4.0 International License.
